- 12 -
1990
Amount Treatment by Toraya
Motomi $25,230 Deducted as purchase expenses
Motomi 3,600 Deducted as child care expenses
Scott 3,600 Deducted as truck expenses
Motomi 7,933 Deducted as office expenses
Total $40,363
1991
Amount Treatment by Toraya
Motomi $24,000 Deducted as purchase expenses
Motomi 12,000 Deducted as office expenses
Total 36,000
Those additional payments were not reported on the Kudos' Forms
W-2 for 1990 and 1991, and the payments were not reported as
income by them on the tax returns they filed for those years.
On the Federal income tax returns they filed for 1990 and
1991, the Kudos did not claim any itemized deductions for
expenses they incurred on Toraya's behalf. The parties now agree
that the $25,230 and $24,000 payments Toraya made to Motomi in
1990 and 1991, respectively, are income to the Kudos. The
parties also agree that the Kudos are entitled to additional
itemized deductions on Schedule A in the amounts of $21,249 and
$17,634 for 1990 and 1991, respectively.
Motomi handled the financial affairs for her family. In
1990 and 1991, she deposited cash in the amounts of $42,506 and
$46,871, respectively, to the Kudos' bank account No. 037-439056
at Sumitomo Bank (Sumitomo account).
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